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2024 Supreme(Online)(Kar) 42421

KARNATAKA HIGH COURT
M. Nagaprasanna, J
Columbia Pacific Communities Private Limited – Appellant
Versus
Serene Urbana Apartment Owners Welfare Association – Respondent
Writ Petition No.5789 OF 2024



Advocates:
For the Appellants/Petitioners: Muralidhara C.
For the Respondents: G. Suriya Narayanan

A service provider in a real estate project, whose obligations are strictly limited to maintenance and services, cannot be impleaded or held liable in regulatory complaints pertaining to the developer's construction, development, or infrastructural obligations under the Real Estate (Regulation and Development) Act, 2016.

Headnote:(A) Real Estate (Regulation and Development) Act, 2016 - Sections 31, 59(1), 62 - Maintainability of complaint against service provider - Petitioner provided specialized senior care services - Petitioner was neither the developer nor contractually responsible for the development or completion of the real estate project - Obligations of the petitioner were restricted to maintenance and related accounting under a Service Agreement - Court held that a mere service provider cannot be dragged into disputes regarding development liabilities, sale deeds, or construction defaults of the developer (Paras 8-9).

Facts of the case:
The petitioner, a senior care service provider, challenged an interim order passed by the Real Estate Regulatory Authority which held that a complaint filed by an Apartment Owners Welfare Association was maintainable against the petitioner. The petitioner contended that they were engaged solely for maintenance services and had no involvement in the development or legal obligations associated with the project's construction or the developer-owner dispute.

Findings of Court:
The court found that the Service Agreement and sale deeds clearly limited the petitioner’s role to service provision. The court observed that the developer’s failures or contractual obligations regarding project completion, common areas, and infrastructure could not be shifted to a service provider.

Issues: Whether a service provider of a retirement community can be held liable as a respondent in a complaint filed by an association of allottees before the Real Estate Regulatory Authority regarding developmental and infrastructure disputes.

Ratio Decidendi: A service provider who lacks contractual privity regarding project development and construction obligations cannot be made a respondent in proceedings under the Real Estate (Regulation and Development) Act, 2016, for the developer’s failures.

Result: Writ Petition allowed; impugned order quashed.

Table of Content
1. overview of the petition, the nature of the dispute, and the petitioner's preliminary challenge regarding maintainability. (Para 1 , 2 , 3 , 4)
2. analysis of the complainant's arguments and the prayers sought before the regulatory authority. (Para 5 , 6 , 7)
3. court's findings on the limited scope of a service provider's obligations and the final order quashing the maintainability of the complaint. (Para 8 , 9 , 10)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO a) QUASH THE IMPUGNED ORDER DATED 11/01/2024 (ANNEXURE-A) PASSED BY THE R6 AUTHORITY HOLDING THAT COMPLAINT NO. CMP/UR/211027/0008475 FILED BY R1 IS MAINTAINABLE AS AGAINST THE PETITIONER; b) QUASH THE MEMORANDUM OF COMPLAINT (ANNEXURE-B) UNDER SECTION 31 OF THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 READ WITH SECTION 29 OF THE KARNATAKA REAL ESTATE (REGULATION AND DEVELOPMENT) RULES, 2017 FILED BY R1 AGAINST THE PETITIONER PENDING BEFORE THE R6 AUTHORITY.

THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 10.09.2024, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-

CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

CAV ORDER

The petitioner/Columbia Pacific Communities Private Limited, a company incorporated under the provisions of the Companies Act, 1956 is knocking at the doors of this Court calling in question an interim order dated 11-01-2024 passed by the Karnataka Real Estate Regulatory Authority (‘RERA’ for short) in No.CMP/UR/211027/0008475 and seeking a declaration that the petition filed by the 1st respondent before the RERA is not maintainable qua the petitioner / 5th respondent.

2. Heard Sri C. Muralidhara, learned counsel appearing for the petitioner and Sri G. Suriya Narayanan, learned counsel appearing for respondent No.1.

3. Facts, in brief, germane are as follows:-

The petitioner is said to be a company engaged in the business of providing specialized senior care services and is said to be well known for development and maintenance of retirement communities across the country. The petitioner / company was incorporated in the year 2009 and is said to be experienced senior living community services provider. Serene Urbana (hereinafter referred to as ‘the Community’ for convenience) is a part of Ozone Urbana developed by the 2nd respondent as an integrated township, which developed the subject property with a view to offer senior citizens tranquillity and serenity in the City. The 1st respondent, a Society registered under the Karnataka Societies Registration Act, 1960, registers a complaint before the 6th respondent/RERA. In the said complaint there were several respondents. The 5th respondent is the present petitioner. On registration of the complaint, the petitioner had knocked at the doors of this Court in Writ Petition No.8368 of 2022 contending that the petitioner has nothing to do with the dispute between the complainant and the developer or any other entity. The petitioner was only a service provider. Therefore, the complaint against the petitioner was not maintainable. This Court on the preliminary objection raised by the petitioner regarding maintainability directed it to be decided at the threshold and remitted the matter to the hands of the RERA. The RERA by the impugned order holds that the complaint against the petitioner as well, is maintainable among others. The petitioner is back to the doors of this Court in the subject petition.

4. The learned counsel for the petitioner would contend that the dispute is between the developer - Ozone Urbana Infra Developers Private Limited or any other entity with the complainant before the RERA. The complainant before RERA is the Serene Urbana Apartment Owners Welfare Association. They have a working dispute with regard to several development issues. There is no contract between the complainant before the RERA and the petitioner. The petitioner has a contract with Ozone Urbana for providing services.

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